The term artists' books is difficult to define. The debate over the "true" definition of the term has lasted for several decades.  The general consensus is that there is no one definition. Many other terms are also used to suggest the same concept: book art, book as artwork, bookwork, artists' bookworks, book objects, artists books (no apostrophe) and there are likely more. While none of the terms is incorrect (as there is no one definition for any of them either), the term artists' books seems to predominate, and I will use it throughout this site and in the following discussion where I will present some ideas the term does encompass.
Artists' books must be contrasted with other terms that may appear to be the same, but are, in fact, vastly different. These are: art book, livre d'artiste, illustrated book and painter's book.  The first term is well clarified by Richard Kostelanetz:
There is a crucial difference between presenting an artist's work in a book form – a retrospective collection of reproductions – and an artist making a book. The first is the honorific art book. 'Book art' should be saved for books that are works of art, as well as books.
The next three terms are all used to refer to the same type of work. These terms, most specifically livre d'artiste, came into parlance in France during the 1890's. The art dealer Ambroise Vollard began to commission his artists to illustrate texts, often classics, and then to have these works finely printed and bound. These are not works conceived and produced by the artist, nor are they free from the pressures of the art market, which are both qualities antithetical to artists' books. The idea of a book conceived wholly by the artist is fundamental to the concept of artists' books.
Unique books are related but different [than published fine books]. Divorced from the notion of publishing and unrestricted by the economic and structural limitations of manufacture, they can take their "bookness" to the limits of a maker's imagination. 
...[B]ooks which have been produced by artists [are] distinct from other kinds of art publishing in that they're not tied to the conventions of literature or criticism or illustration. The principle [sic] theory of artists' books is that instead of being about art they're rather books which are intended as artworks themselves. 
Taking the structure of the book beyond everyday expectations is often a goal of the artist's book. Other important aspects of artists' books are: the use of cross-disciplinary media, the production of the work through an accessible (usually inexpensive) means, and the reaction against the established art world/art market.
Often the impetus behind the use of the book form is to cross boundaries and defy existing limitations and definitions. It is a medium of expression that allows for, in fact calls for, the combination of several modes of creation.
"In fact, this confluence of art forms had affected artists' books to such a degree that they have become characteristically and foremost multidisciplinary. ... [T]his tendency towards cross-disciplines also allows an artist to belong to no explicit discipline while referring to many." 
This freedom from a definitive role can allow the creator to make something that is not considered part of his/her usual oeuvre or method of working. Even artists, who are supposedly "free spirits," need a way to grant themselves permission to explore ideas outside of their normal modes of thought. Artists' books take on this role.
The self-production of the book and the desire to subvert the establishment stem from a wave of creation during the 1960's in the U.S. (This antiestablishment impulse is, of course, omnipresent throughout the history of art, but this sentiment is defined as crucial to the current understanding of the term in the literature I have read.) The "democratic" impulse in the artist's book movement was intended as a means "to provide a critique and an alternative to the system whereby a work of art is unique, revered, inaccessible to any but an elite, and bought and sold as investments and as highly prestigious objects of private property."  By this time in history, a book was no longer a prized invaluable object (like a manuscript handlettered on vellum), but a mass produced item available to many. Breakthroughs in technology at this time – primarily photocopying and offset printing – made the production of the book economically easy for artists to do themselves. The idea behind the work and the production of multiple copies are both removed from established channels.
That is how the literature I have read presented the development of and reason behind artists' books. While I understand the reasoning behind the democratic/antiestablishment desire, I do not feel it is bad to create unique objects of art (of any medium). The point of certain creations is their uniqueness as the vision of an individual. However, it would be ideal if that vision could be easily shared with a large audience. I also have no problem with art being highly valued, as that communicates the worth of pursuing and presenting a personal voice or vision. But hoarding of these creations as status symbols or prizes defeats the purpose of any artist's desire to communicate through making a physical representation of ideas and thoughts in his/her mind to share with a larger audience.
I think contemporary artists' books seek a balance between these two views of the art world. Now an artist's book is acceptable as either a unique item or a number of copies, an edition. (Although the number is usually limited to retain the value of the work.)
The word "book" is often perceived of as a small, confined concept. Upon further exploration, one finds that the possibilities that can be contained within it are limitless. So the book becomes "an unfathomable large single concept which can itself be understood as a metaphor for the boundlessness of the imagination" — a perfect arena in which an artist can create.
For others' thoughts on artists' books, please see:
Footnotes 1. Stefan Klima, introduction to Artists' Books: The Book as a Work of Art, 1963 - 1995 (Hants, England: Scholar Press, 1995), 7. 2. Anne Moeglin-Delcroix, "Bibliophilisms: the Multiple and the Unique," in Livres d'artistes/Livres-objets (Artists' books/Book objects) (Paris: C.E.R.P.M., 1985), [unpaged]. 3. Richard Kostelanetz, "Book Art," in Artist's Books: A Critical Anthology and Sourcebook, ed. Joan Lyons (Rochester, NY: Visual Studies Workshop Press, 1985), 28. 4. Joan Lyons, introduction to Why Artists' Books? ([Cambridge, Mass.]: Department of Printing and Graphic Arts, 1993), [unpaged]. 5. Tom Guest, "An Introduction to Books by Artists," in Books by Artists (Toronto: Art Metropole, 1981), 7. 6. Ibid., 8. 7. Ibid. 8. Ibid., 9.